Latent Diffusion — Why Stable Diffusion Doesn't Diffuse Pixels
The single decision most responsible for putting image generation on consumer GPUs was not a better denoiser or a faster sampler — it was moving the entire diffusion process out of pixel space. Latent diffusion compresses images roughly 48× with a learned autoencoder, runs every denoising step in that compressed space, and decodes once at the end. Same theory as posts 2–5, radically different economics: this is the architecture decision that made Stable Diffusion stable to run.
Stable Diffusion doesn't diffuse pixels. A perceptually-trained autoencoder compresses images ~48×, the entire diffusion apparatus runs unchanged on latents, and a decoder re-synthesizes texture once at the end. The economics, the three-piece architecture, the autoencoder-as-quality-ceiling caveat, and why video inherited the pattern.